Natural gas market in Italy

Natural gas market in Italy

The natural gas market in Italy (2004)

Natural gas consumption has grown rapidly in Italy in the past decade. Italy produced 0.5 Tcf of natural gas in 2004, while consuming 2.8 Tcf. An increase in the construction of combined-cycle, gas-fired turbines has driven the increase in natural gas consumption.

Italy’s natural gas imports supplied 84 percent of the country’s domestic consumption in 2004, versus 59 percent in 1985. The largest sources of these imports in 2004 were Algeria (38 percent), Russia (32 percent), and the Netherlands (14 percent).

Sector Liberalization

Natural gas liberalization has slowly eroded Eni’s dominant position in the sector, with Eni’s share of total natural gas delivered to the national grid declining from almost 100 percent prior to liberalization to 68 percent in 2003.

Eni controls a large share of Italy’s natural gas production and owns and operates the domestic natural gas transportation system (Snam Rete Gas). Another Eni subsidiary (Stogit) manages most of the natural gas storage facilities in the country. Eni subsidiary Italgas controls one quarter of the retail natural gas distribution market.

Exploration and Production

Eni controls a large share of Italy’s domestic natural gas production and exploration, both offshore and onshore. Besides Eni, new domestic and international operators are developing exploration and production opportunities.

Pipelines

Italy has the third-largest natural gas transmission system in Europe, consisting of 19,000 miles of pipelines. Italian law guarantees open and non-discriminatory access to the system.

Most of Italy’s natural gas imports enter the country through international pipelines:

Transmed from Algeria, having a capacity of 2.33 billion cubic feet per day (Bcf/d), expandable to 3.48 Bcf/d